Yesterday’s Budget includes a temporary company car tax BIK easement for some plug-in hybrids.
The full Budget document published by HM Treasury explains that the measure will apply from 1 January 2025 to 5 April 2028, to prevent the tax charge applied to the cars ‘increasing significantly’ due to new emissions standards.
A further policy paper on the measure explains that new EU and UN emission standards introduced from 1 January 2025 observe higher CO2 emissions for PHEVs than previous standards.
Therefore, it states: “During the easement period, the CO2 emission figure for certain PHEVs will be deemed to be a nominal figure for the purposes of the Benefit In Kind charge rather than the CO2 figure on the registration document. This will have the effect of reducing the value of the Benefit In Kind charge that applies.
“This measure aims to ensure consistency in the tax treatment of company cars across the United Kingdom by mitigating the impact of updated emission standards on PHEVs.”
